A Bi-Objective Mathematical Model to Determine Optimized Warranty Time Simultaneously Considering Manufacturer and Customer Advantages

Nowadays,the product warranty has turned into the essential facet of business operations and is of great influence on consumers' purchase decisions and their satisfaction. In addition, there is a conflict between the customers' satisfaction and manufacturer profit at the same time. In order to consider their goals simultaneously, this study develops a bi-objective mathematical model that integrates queueing theory with warranty policies to minimize customer's waiting time and maximize manufacturer profitability. The proposed model also considers failure costs, maintenance cost, the cost of customer's waiting time and the revenue of selling products to determine product price with warranty, service rate within a year, and optimal warranty period. The Lp-metric method is applied to gain a uni-objective function and then solved in LINGO software. The results of the numerical example and sensitivity analyses demonstrate the applicability and accuracy of the suggested model and the solution method.

Keywords:

warranty policy , waiting time , bi-objective optimization , Lp-metric method